Ag Market Commentary

Corn futures are trading mostly one cent per bushel higher this morning. They were fractionally higher on Thursday. The weekly EIA report indicated that ethanol plants produced 1.1 million barrels per day of ethanol in the week of August 3. That was a jump of 36,000 bpd and the most since the week of December 1. Ethanol stocks jumped 956,000 barrels to 22.923 million barrels. Analysts are estimating that old crop corn export sales in the week of August 2 totaled 300,000-600,000 MT, with new crop in a range of 400,000-900,000 MT. USDA will be out with the numbers at 7:30 AM CDT. The average trade estimate calls for Friday’s WASDE report to drop Brazil corn production 1 MMT to 82.5 MMT.

Soybean futures are currently fractionally lower after seeing gains of 4 to 5 cents in most contracts on Wednesday. Nearby soy meal was up $4.50/ton, with soy oil down 14 points. There have still been zero deliveries against the August meal futures. The oldest long is dated March 21. The Chinese Dalian Exchange saw domestic soybean futures prices up 3.95% on Wednesday. Trade estimates are running 100,000-400,000 MT for old crop soybean sales in the week of 8/2 and 300,000-600,000 MT for new crop ahead of Thursday’s Export Sales report. Soy meal is seen at 40,000-250,000 MT, with soy oil expected to range 8,000-34,000 MT. Traders in a Bloomberg survey are estimating that the Brazil production number will be 119.3 MMT (-0.2) on Friday, with Argentina at 36.7 MMT (-0.3).

Wheat futures are 5 to 8 cents per bushel lower across the three markets this morning. They closed the Wednesday session with most contracts 1 3/4 to 6 cents in the green. The USDA Export Sales report is expected to show all wheat sales during the week of August 2 between 200,000-500,000 MT. Last week’s sales totaled 382,452 MT. US Wheat ending stocks are expected to be down 18 mbu in Friday’s USDA report to 967 mbu according to pre-report surveys. That is mainly due to expected production reductions. A German Farm Cooperative group sees the 2018 German wheat harvest at 19.2 MMT, down from last years 24 MMT, citing hot and dry conditions.

Live cattle futures fought back to settle higher in most contracts on Wednesday, with nearby August down a quarter. Feeder cattle futures were steady to $1.025 higher on the day. The CME feeder cattle index was up 50 cents from the previous day on 8/7, reaching $150.56. Wholesale boxed beef values were modestly higher on Wednesday afternoon. Choice boxes were up 24 cents at $205.73, while Select boxes were 35 cents higher at $198.86. Weekly FI cattle slaughter was estimated at 357,000 head through Wednesday. That is up 5,000 head from the previous week and 6,000 head above the same week in 2017. Wednesday morning’s FCE online auction showed no sales on 464 head offered, with 2 lots passing on offers of $112.

Lean hog futures posted 57 cent to $1.575 losses in most contracts on Wednesday. The CME Lean Hog Index was down $1.40 on August 6, to $66.64. The USDA pork carcass cutout value was down $1.08 from the previous day at $70.97 on Wednesday afternoon. The picnic was the only primal reported higher. The national base hog carcass value was down $2.16 on Wednesday afternoon, with the weighted average totaling $47.70. USDA estimated Week to Date FI hog slaughter at 1.31 million head through Wednesday. That is down 33,000 head from last week due to plant downtime but 30,000 head above the same week last year.

Cotton futures are trading 9 lower (Oct) to 7 higher (July) this morning. They were down 32 to 83 points on Wednesday, in sympathy with a crude oil sell off. WTI Crude saw sharp $2.39 per barrel losses on Wednesday but is holding its ground this morning. The weekly USDA Export Sales report will be released at the normal 7:30 a.m. CDT time. This report will complete sales and shipments data for the 2017/18 MY. Traders, in general, are expecting NASS to show a reduction to the US cotton production figure on Friday. The Cotlook A index was up 25 points from the previous day at 98.25 cents/lb on August 6. The weekly USDA AWP is currently at 80.06 cents/lb and will be updated on Thursday.

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